Are Solar Panels Worth It in 2023?

Several factors can play a role in whether or not solar panels are worth it for you, including:

• The weather and climate where you live
• Your roof’s steepness, shading and size
• The solar incentives available in your area
• How much energy your household consumes

For instance, if you live in a state that receives a lot of sunlight and has ample solar incentives, in addition to having a large, south-facing roof, the savings you’ll see from solar will be very high. On the other hand, if you live somewhere with less sunlight, fewer solar incentives and a steep roof, solar may still be worth it for you, but your overall energy savings will likely be lower.

According to our 2023 survey of 1,500 homeowners with solar, respondents reported paying an average of $15,000 to $20,000 for their solar panel systems. However, every solar installation is different, and the Solar Energy Industries Association (SEIA) reports that a solar installation can cost upwards of $25,000.

The total cost of your solar panel system can vary depending on where you live and the solar provider you choose. You can compare average price points for some of the top solar providers in the U.S. below. Cost figures represent the total cost of a solar panel system with installation.

*Cost figures are based on results from our 2023 survey of 1,500 homeowners with solar. Your costs may vary depending on individual factors. 

The state you live in can also factor into how much your solar panel installation will cost:

In addition to your location and the provider you choose, other factors can influence the cost of your solar system, including:

• Your home energy needs
• Your solar system size
• The type of panels you install
• Additional equipment like solar batteries or inverters
• Other related services, such as tree removal, energy efficiency audits, electric vehicle (EV) chargers, etc.

The only way to know exactly how much your solar panel system will cost is to get a quote from a trusted solar installer in your area.  To get matched with a top provider, click here for a solar estimate today.

How Much Can You Save With Solar?

The average payoff period for a solar panel system in the U.S. is around 8.5 years. After paying off your solar system, you’ll enjoy significant savings by drastically reducing or eliminating your energy bill. Considering the average solar system lasts 25 years or longer, that’s over 16 years of net savings. Most people who install solar on their homes will save thousands of dollars in energy costs over the lifespan of their solar energy system.

There are, however, some instances when solar panels may not yield as high of returns as you want. According to Nilsen, local electricity rates, your total system cost and whether you pay up-front, take out a loan, or lease your system can all affect your return on investment (ROI). Changing compensation patterns with your local utility or an unexpected lapse in your system’s performance may cause your payback period to take longer.

In these rare instances, Nilsen advises contacting your solar installer about your system’s expected production and any discrepancies with the current output.

In addition to offering protection against rising electricity prices, a solar installation with a storage system provides a valuable backup during power outages. If you live in an area prone to severe weather or blackouts, installing solar panels with a backup battery can be more worthwhile.

Three major pros of switching to solar include reducing your carbon footprint, saving on energy costs and taking advantage of solar incentives.

Reduce Your Carbon Footprint

When you install a photovoltaic (PV) system, your panels will generate electricity from the sun, reducing your reliance on fossil fuels. The National Renewable Energy Laboratory (NREL) estimates that for every 1,000 kWh of clean electricity your solar panels generate, you save 1,400 pounds of carbon dioxide emissions from traditional energy sources. This is the equivalent of saving nearly 17,000 pounds of carbon dioxide emissions for the average U.S. household every year.

Save on Energy Costs

Although the initial cost of solar panels can be high, the long-term benefits can significantly outweigh the upfront investment. Because you’ll be generating your own electricity, you can reduce or even eliminate your monthly electricity costs. Additionally, as the cost of going solar has decreased significantly over the last decade, the return on investment homeowners see when installing a solar array has also increased.

Additionally, installing solar panels can increase the value of your home and protect you from fluctuating utility rates, helping you save even more over time.

Take Advantage of Solar Incentives

Both the federal and state governments offer solar incentives like tax credits or exemptions, net metering, rebates and more as a way to encourage solar adoption. As previously mentioned, all U.S. residents are eligible for the federal solar tax credit, worth 30% of the overall cost of your solar system. Most states and utility companies offer additional incentives that can help you save even more when installing a home solar system.

High up-front costs, weather dependence and home aesthetics are three reasons that homeowners may hesitate to go solar.

High Up-Front Costs

Although most homeowners with solar save money in the long run by dramatically reducing or eliminating their energy bills, solar is still an expensive investment. According to our 2023 poll of 1,500 homeowners with solar, most respondents reported paying between $15,000 and $20,000 for their system. While paying the total cost of your system upfront will result in the most savings, many installers offer multiple financing options, including solar loans and leases.

Weather and Climate Dependence

Clouds, seasonal variations and obstructions like trees can cause your solar panels to generate less energy. Additionally, solar panels do not generate energy at night when the sun isn’t out. All of these factors can cause inconsistencies in the efficiency of your solar panels.

Energy storage solutions like solar batteries can help abate these problems, as you can store your energy for later use. Most states also offer net metering, which allows you to sell back the excess energy your solar panels generate to the grid in exchange for a credit on your utility bill. Net metering credits can offset the cost of the energy you’re purchasing at night when your panels aren’t operating.

Aesthetics

Some people prefer the appearance of a traditional roof and dislike how rooftop solar looks on a home. To address this issue, several solar manufacturers have developed solar shingles that blend into the roof and accommodate concerns about solar panel appearance. However, solar shingles are typically more expensive and not offered by many solar installers.

A solar energy system is not suitable for every homeowner. But if your home has the right location, roofing and state tax incentives and you experience high energy bills, you might generate significant savings with solar energy. For the right home, solar energy is an investment that pays for itself over time, so be sure to take some time to consider the factors listed in this guide to determine if solar panels are worth it for you.

We recommend you use our tool below to find local solar installation companies in your zip code. These companies will conduct a consultation to provide accurate information and estimates on your possible solar savings.

Faith Wakefield is a writer based in North Carolina. She holds economics and English degrees from UNC Chapel Hill, and her work has been featured on EcoWatch, The World Economic Forum and Today’s Homeowner. In her free time, she loves to binge-watch personal finance videos on YouTube, collect books and spend time in nature.

Tori Addison is an editor who has worked in the digital marketing industry for over five years. Her experience includes communications and marketing work in the nonprofit, governmental and academic sectors. A journalist by trade, she started her career covering politics and news in New York’s Hudson Valley. Her work included coverage of local and state budgets, federal financial regulations and health care legislation.

Karsten Neumeister is an experienced energy professional with subject-matter expertise in energy policy and the solar and retail energy industries. He is currently the Communications Manager for the Retail Energy Advancement League and has prior experience writing and editing content for EcoWatch. Before EcoWatch, Karsten worked for Solar Alternatives, curating content, advocating for local renewable energy policy and assisting the solar engineering and installation teams. Throughout his career, his work has been featured on various outlets including NPR, SEIA, Bankrate, PV Mag and the World Economic Forum.